Economist commends Finance Minister

AN Economomist has commended the Minister of Finance, Economic Development and Investment Promotion Professor Mthuli Ncube for revising downwards the proposed passport and toll fees, which come into effect on 1 January.

In his 2024 National Budget presentation, Prof Ncube proposed a 100 percent upward review of toll fees on premium roads, that is, Harare-Beitbridge and Plumtree-Mutare and other roads, with effect from January 1, 2024.

He further proposed an increase in passport fees from the current US$120 to US$200, saying that additional revenue generated from the measures would be ring-fenced towards road infrastructure development.

However, following a debate in Parliament, the proposed toll fees were reduced by 50 percent. In terms of passports, the fee was raised from US$120 to US$150 for ordinary passports.

Another proposed measure which includes the one percent wealth tax for a property worth US$1000 000 has also been reviewed and it will now apply to properties worth US$250 000 and above.

Mr George Nhepera

Responding to questions sent to him by the Business Chronicle, economist and financial advisor Mr George Nhepera said the reduction in toll and passport fees shows that Prof Ncube is an accommodative minister.

“The reduction in toll gate fees and passport fees is indeed welcome. This is a good demonstration by the Minister of Finance which shows that he is accommodative and accepts genuine concerns raised by the public,” he said.

“There is no doubt that this will spur economic growth and increase business confidence in the way the ministry engages with its stakeholders.”

Mr Nhepera said the minister is walking the talk in terms of conducting a true budget formulation process.

Businesses have been crying foul over the proposed toll fees and other new measures which include the Strategic Reserve Levy.

Prof Ncube proposed to review upwards the Strategic Reserve Levy by US$0,03 and US$0,05 per litre of diesel and petrol, respectively, with effect from 1 January 2024.

They argued this will result in a rise in production cost as transport cost is one of the major inputs in the production chain.

On wealth tax, Mr Nhepera said the upward review of the properties subject to tax is commendable although it could have been done simultaneously with a reduction in percentage tax, to say 0,5 percent.

He said this would promote compliance.

“At the proposed property worth US$ 250 000, the tax due would translate to USD$2 500 per year while a reduction to 0,5 percent would give us US$1 250 per year or US$105 per month.

“In my view, this would be affordable to most wealthy people in our society and effectively remove all the outcry and controversy related to the new tax,” he said. —chronicle